HORRY - GEORGETOWI\I TECHNICAL COLLEGE
coNwAY, souTH CARoLINA
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS AND SCHEDULES
FOR THE YEAR ENDED JUNE 30,2012
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
Table of Contents
organizationalData..................
lndependent Auditor's
Report
..............ffi
,
.......................2-3
................
Management's Discussion and Analysis
...............4-13
Financial Statements:
Statements of Net Assets
....
..........................14
Statements of Revenues, Expenses
and Changes in Net
Assets
Statements of Cash
................. 15
Flows...
....................16-17
Component Unit - Statement of Financial Position
and Statement of
Activities
Notes to Financial
Statements
................18
................... 19-40
Single Audit Act Requirements:
Schedule of Expenditures of Federal
Awards
Notes to Schedule ofExpenditures of Federal
Awards...........
Independent Auditor's Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based
on an Audit ofFinancial Statements Performed in
Accordance r.vith Government Auditing
Standards
..................41-42
...............43
..........................44-45
Independent Auditor's Report on Compliance with
Requirements Applicable to Each Major Program
and Intemal Conhol over Compliance in
Accordance with OMB Circular
,4-133..
Costs
Schedule of Prior Audit Findings
Schedule of Findings and Questioned
................46-47
..........................48
.................49
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
AUDITPERIOD
ruLY 1,2011 THROUGH JUNE 30,2012
AREA COMMISSIONERS
Name
Offrce
Term
Expires
07 -01-2012
Jr. Chairman
Vice-Chairman
07-01-2014
West
Orrie E.
Chairman Emeritus 07 -01-2014
Herman C. Jones
Secretary
07 -01-2012
William H. Munay
07-01-2012
William K. Richardson
07-01-2014
Y. Melvin Nobles
07-01-2014
Donald W. Helms
07 -01-2012
Ronald J. Talbert
07 -01-2012
Brent D. Groome
Joe Thomas Branyon,
Countv
Georgetown
Horry
Horry,
Georgetown
Horq,
Horry
HorD,
Georgetown
Horry
EXECUTIVE STAFF
Mr. H. Neyle Wilson
Dr. Marilyn J. Fore
Mr. Ralph L. Selander
Mr. W. Gregory Thompson
Mr. Harold N. Hawley
Mr. Gregory L. Mitchell
College President
Executive Vice President for Academic Affairs
Vice President for Technology and Institutional Planning
Associate Vice President for Student Affairs
Vice President for Finance and Business Affairs
Vice President for Workforce Development and
Continuing Education
AREA SERVED
Horry County
Georgetown County
COUNTIES PROVIDING FINANCIAL SUPPORT
Horry County
Georgetown County
9(
"5'"'#"Nar
Monm, P.A.
Ccrtificd Public Account nts
_,lrr---'SINCE
trn'
Robin B. Poston CPA
Robert D. Harper, Jr. CPA
Stacey C. Moree CPA
P.
O. Box 576
307 Church Sreet
P O. Box 1550
Ceorgetoun, SC 29442
106 lUall Srreet, Litchfield
Pauleyr lsland, SC 29585
Tel (843) 527-14ll
Tel (841) ?37-9t25
Fax (841) 217-1621
Fax (841) 5467277
E.mail, hpm2@sc.rr.com
E-mail, HPM@sc.n.com
INDEPENDENT AUDITOR'S REPORT
Horry,- Georgetown Commission for Technical Education
Horrr, - Georgetown Technical College
Conway, South Carolina
We have audited the accompanying basic financial statements of Horry, - Georgetown Technical
College, a member institution of the South Carolina Technical College System, as of and for the
years-ended June 30, 2Ol2 andJune 30, 2}ll,as listed in the table of contents. These financial
statements are the responsibility of the College's management. Our responsibility is to express
opinions on these basic financial statements based on our audits. We did not audit the financial
100 percent
sLtements of Horry - Georgetown Technical College Foundation, Inc. which represents
financial
Those
of the discretely presented component unit presented in the financial statements.
and our opinion on
statements weri audited by other auditors whose report has been furnished to us,
the basic financial statements insofar as it relates to the amounts included for Horry Georgetown
the
Technical College Foundation, Inc. as a discretely presented component unit, is based solely on
report of other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the United
inGovernment Auditing
States ofAmerica and the standards applicable to financial audits contained
that we
Standards,issued by the Comptroller General of the United States. Those standards require
plan and perform the audit to obtain reasonable assurance about whether the financial statements
evidence supporting
are free oimaterial misstatement. An audit includes examining, on a test basis,
the
the amounts and disclosures in the financial statements. An audit also includes assessing
well as evaluating
accounting principles used and the significant estimates made by management, as
reasonable basis
the overall financial statement presentation. We believe that our audits provide a
for our opinion.
ln our opinion, based on our report and the report of other auditors, the basic financial statements
position of Horry referred to above present fairly, in all material respects, the respective financial
changes
Georgetown Technical College, as of June 3},z}lzand June 30, 2011, and the respective
in thJ financial position and cash flows, where applicable, thereof for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
MsvseRs: AusnrceN lNSTrrurE
or Csnrrrrro Pualrc AccouNr^3r, a Souru CenouNx AssocreroN or Crrrtrrpo Pusltc Accouxr,{Nrs
In accordance with Government Auditing Standards, we have also issued a report dated Sepember
28,2012 on our consideration ofthe College's intemal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts and gmnt agreements
and other matters. The purpose ofthat report is to describe the scope ofourtesting ofintemal control
over financial reporting and compliance and the results ofthat testing, and not to provide an opinion
on the intemal control over financial reporting or on compliance. That report is an integral part of
an audit performed in accordance wrth Government Auditing Standards and should be considered
in assessing the results ofour audit.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis information on pages 4 through 13 be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures
to the required supplementary information in accordance with auditing standards generally accepted
in the United States of Americ4 which consisted of inquiries of management about tlre methods of
preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit ofthe basic financial statements. We do not express an opinion or provide any assurance
on the information because the limited procedures do not provide us with suffrcient evidence to
express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise Horry - Georgetown Technical College's basic financial statements. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional
analysis as required by U.S. Office of Management and Budget Circular A-133, 14 udits of States,
Local Governments, and Non-ProJit Organizations, and is not a required part ofthe basic financial
statements of Horry - Georgetown Technical College. The schedule of expenditures of federal
awards is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the financial statements. The information
has been subjected to the auditing procedures applied by us and other auditors in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, based
on our report and the report ofother auditors, the information is fairly stated in all material respects,
in relation to the financial statements taken as a whole.
?lo"Pr
,Pao*on
v
Y4orut,P A'
Harper, Poston & Moree, P.A.
Certifi ed Public Accountants
Georgetown, South Carolina
September 28, 2012
J
MANAGEMENT'S DISCUSSION AND ANALYSIS
4
MANAGEMENT'S DISCUSSION AND ANALYSIS
The management of Horry-Georgetown Technical College offer users and other readers of the College's financial
of its financial activities for the fiscal years ended June 30,2012
This discussion and analysis should be read in conjunction with the consolidated financial
and June 30,201
statements and the footnotes thereto, which follow this section.
statements this narrative overview and analysis
l.
The financial statement presentation format provides a comprehensive, entify-wide perspective of the College's
flows. The financial statements
are designed to emulate corporate presentation models whereby all College activities are consolidated into one
total. The Statement of Net Assets combines and consolidates current financial resources (short-term spendable
resources) with capital assets and discloses any debt obligations.
assets, liabilities, net assets, revenues, expenses, changes in net assets, and cash
The Statement of Revenues, Expenses, and Changes in Net Assets focuses on both the gross costs and the net
costs of College activities which are supported substantially by property taxes, state allocation, state and federal
grants and contracts, student tuition and fees and auxiliary enterprise revenues. This approach is intended to
summarize and simplifr an analysis of costs for various College services to students and the public.
As additional information, financial statements for the Horry-Georgetown Technical College Foundation (The
Foundation) are also included.
presented component unit.
All financial activities
and balances of the Foundation are disclosed as a discretely
Financial Highlights
o
o
o
The total net assets of the College at June 30,2012, increased to $88,572,728 from $79,554,668 during
the fiscal year. Of this amount, $37,200,679 (unrestricted net assets) may be used to meet the College's
ongoing obligations. This increase was driven by enrollment growth, nominal tuition increases, receipt
of the local Educational Capital Sales and Use (Penny) Tax proceeds, College-wide cost reduction
initiatives, and receipt ofvarious federal, state, and private grants.
The college is in the midst of a multi-year capital improvement initiative that includes constructing new
academic facilities, refurbishing buildings, and improving its infrastnrcture. The capital improvements
are financed by College Funds, private donations, and the local Educational Capital Improvement Sales
and Use (Penny) Tax.
In spite of unprecedented reductions in State support, the College was able
further evidencing its financial strength.
to
increase its net assets,
Overview of the Financial Statements
The College is engaged only in Business-Type Activities (BTA) that is financed in part by fees charged to
students for educational services. Accordingly, its activities are reported using the three financial statements
required forproprietary funds: Statement of Net Assets; Statement of Revenues, Expenses, and Changes in Net
Assets; and Statement of Cash Flows.
The Statement of Net Assets presents the financial position of the College at the end of the current and prior fiscal
years, and classifies assets and liabilities into current and non-current. The difference between total assets and
total liabilities is net assets, which are displayed in three broad categories: Investment in Capital Assets (net of
related debt), Resricted and Unrestricted. Net assets are one indicator of the current financial condition of the
College, while the change in net assets is an indicator of whether the overall financial condition has improved or
worsened during the year.
The Statement of Revenues, Expenses, and Changes in Net Assets is a statement of net income with an entitywide perspective. Revenues and expenses are categorized by operating and non-operating, and expenses are
reported by object type.
The Statement of Cash Flows will aid readers in identifring the sources and uses of cash by the major categories
of operating, capital and related financing, non-capital financing, and investing activities. This statement also
emphasizes the College's dependence on state and county appropriations by separating them from operating cash
flows.
Financisl Analysis
In addition to the financial information, charts and graphs are provided to enhance an understanding
institutions financial condition and related changes from the prior fiscal year.
of the
Net Assets
For the Years Ended June 30,
Increrse
20lt
2012
Current assets
(I)ecrease)
Percent
Chanse
(24.22%)
$
29,660,338
$
39,139,535
$ (9,479,t97)
s
51,247,009
$
43,657,t22
s
Non-current assets
Capital assets, net of depreciation
Other
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Investment in capital assets, Net
of Related debt
Restricted for: expendable
Unrestricted
Total Net Assets
$
$ 15,859,200
s 96,766,s47
$
s 6,s41,3't3 $
$ t,652,446 $
$ 8,193,819 $
$
$
3,956,010
86,752,667
5,3r6,361
r,881,638
7,t97,999
7,589,887
17.39o/o
$ I 1,903,190
$ 10,013,880
300.890/.
$ t,225,0t2
$ (229,t92)
$ 995,820
$ 43,184,387 $
51,220,s96
8,036,209
$ 152,16l $
$ 36,218,r20 $ 982,559
$ ?9,554,668 $ 9,0r 8,060
(708)
151,453
$ 37 ,200,679
$ 88,572,728
I I .54o/o
23.040/o
(t2.tgo/o)
13.830/0
t8.61%
(0.4?o/o)
2.71%
I1.34o/o
The previous schedule is prepared fiom the College's statement of net assets, which is presenled on an accrual
basis of accounting, whereby assets are capitalized and depreciated. Total assets increased by $10,013,880 or
ll.5% over prior year. Current assets decreased as a result of capital expenditures associated with the
construction of new academic facilities and infrastructure improvements. Capital assets increased significantly
due to ongoing constnrction activities and the completion of several large projects including the Speir Dental
Health building, new campus signage, a Wildlife Pavilion and expanded parking.
Total liabilities increased by $995,820 or 13.8% during the fiscal year due primarily to an increase in accounts
payable associated with construction projects.
Total net assets increased by $9,018,060 or ll.3% during the fiscal year. As evidenced by this increase, the
College continues to benefit from a sound financial position as assets substantially exceed liabilities.
6
Operating Results for the Years Ended
For the Years Ended June 30,
Increase
(Decrease)
20ll
2012
Percent
Chanq€
Op€rating Revenue
$
Tuition and Fees
Federal and State Contracts
Auxiliary
Other
s
$
$
Total Operating Revenue
$
kss
s
Operating Expenses
Net Operating Expenses
$
$
$
$
$
s
19,2s4,333
7,362,6t0
801,391
299,241
27,7 t7,575
53,569,269
(25,8s1,694)
18,3
r3,473
7,096,541
467,977
322,384
26,200,37s
s
54,328,342
$
(28,121,967)
$
$
$
$
$
$
s
940,860
5.14o/o
266,069
3.75%
333,4t4
71,250/o
(23,143)
(7.18%)
1,517,200
5.79o/o
(759,073)
2,276,273
(t.40%)
(8.0e%)
Nonoperating Revenue
(Expenses)
$
$
$
$
18,953,680
(Expenses)
$
29,576,256
$
$
$
i
$
Capital Grants and Gifts
$
5,293,498
$
Increase in Net Assets
Net Assets - Beginning
Year
$ 9,018,060 $ 10,235,339 $ (t,217,279) (1r.89%)
s 79,ss4,668 S 69,319,329 S 10,23s,339 t4.7',10/o
State Appropriations
Horry County
Georgetor+'n County
Ofter
Total Non-Operating Revenue
of
6,811,576
3,346,000
465,000
6,920,970
3,415,000
465,000
22,091,071
32,892,041
5,47 t,26s
$ (r09,3e4)
$ (69,000)
$$ (3,137,391)
$ (3,31s,785)
(10.08%)
s
(3.2s%)
(t'17,767)
(1.58o/o)
(2.02Yo)
0.00o/o
(14.20o/o)
Net Assets - End ofYear
As shown abov€, the College experienced an increase in net assets dluring 2012. The increase in net
assets
of
$9,018,060 or I 1.3% was facilitated by an in$ease in tuition revenues due to enrollment growth, a nominal tuition
increase, and receipt ofthe penny tax proceeds.
For 2012, total operating revenue increased by approximately $1,517,200 or 5.7902 over prior year. This increase
was driven by increased Spring enrollment and a nominal tuition increase. Changes in operating expenses are
addressed below.
The State funding received in 2012, in absolute dollars, has not been this low since before 1997. ln spite ofstate
funding reductions over recent years, the college enjoyed a substantial increase in net assets during the year
primarily driven by enrollment gains and r€ceipt ofthe penny tax proceeds.
On the page which follows is a graphical illustration ofoperating revenues and expenses.
7
Revenue by Source
0.5o/o
sTuition and Fees
oAuxiliary
lo/o
e Federal and State Contracts
oOther
o Non-Operating Revenue
Operating Expenses
0.3Yo
Ilnstruction
trAcademic Support
trStudent Services
E In stitutional Support
r Aux iliary Enterprises
tr Operation and Maintenance of Plant
E! Scholarships
oDepreciation
Operating Expenses by Function
For the Years Ended June 30,
Increase
20tt
2012
Percent
Chanse
(Decrease)
Operating Expenses
Instruction
Academic Support
Student Services
Operation and Maintenance
of Plant
Institutional Support
Scholarships
Auxiliary Enterprises
Depreciation
Total Operating Expenses
$
$
s
17,060,934
$
$
$
$
$
$
4,771,670
4,469,107
3,748,304
4,913,351
16,417,317
234,s0s
1,954,081
53,569,269
s
$
$
$
s
$
$
l7,r
4,193,309
$
s
$
$
s
$
4,964,434
5,258,238
16,309,076
182,502
$
$
$
$
$
11,729
4,349,318
1,9s9,736
54,328,342
(50,795)
(0.30%)
119,789
2.7 5o/o
(445,005)
(10.61%)
(t92,764)
(3.88%)
(6.s6%)
(344,887)
108,241
0.66%
s2,003
28/9%
(0.2e%)
(1.40%)
(5,655)
(7s9,073)
The following is a multi-year graphical trend of operating expenses by function.
Comparlson of OperaUngExpenses FlscalYears 2012201'l and 2010
18,000,000
16,m0,000
14,000,000
12,000,000
10,0@,000
8,000,000
6,000,000
4,000,000
2,000,m0
lnstrudbn Academic
Suppott
Student
Services
Operation lnstiMional
and
Suppo.t
Scholarships
Auxliary
Deprecaation
Enterprbes
Maintenance
of Plant
Operating expenses, overall, for fiscal year 2012 decreased by $759,073 or l.4Yo over the prior year. Insffuctional
costs declined as a result of decreased spending in Continuing Education. The College's Continuing Education
market continued to soften due to the ongoing economic downturn, and less corporate spending on training and
development. Student Services expenses also declined due to the reduced spending of a federal community based
job training grant within the Student Services area. Under this same grant the College increased its spending in
Academic Support during the year. Lastly, the College was successful in reducing its operational and maintenance
costs offacilities during the year.
Analysis of Net Assets
For the Years Ended June 30,
20tt
2012
Increrse
Percent
(Decrease)
Chanse
Net Assets
InYestsnent in capital assets,
Net ofRelated debt
Restricted for: expendable
Unrestricted
Total Net Assets
$
$
$
$
$
$
$
$
51,220,596
151,453
3',1,200,679
88,572,728
43,r84,387
152,16l
36,2r 8,120
79,554,668
$
$
$
s
8,036,209
(708)
18.610/o
(0.47o/o)
982,559
2.7lo/o
9,018,060
I1.34%
Net assets may serve over time as a useful indicator ofan entity's financial position. In the case ofthe College,
assets exceeded liabilities by $88,572,728 nd $79,554,668 at June 30,2012 and 201l, respectively. This year-toyear increase in net assets of $9,018,060 or ll.34%o further demonstrales the financial health and economic
viability of the College.
Approximately 58olo of the College's net assets at Jure 30,2012 w€re invested in capital assets (land, land
improvements, buildings and improvements, and equipment). The College uses these capital assets to provide
servic.€s to students; consequently, these assets are 4glavailable for future spending.
June 30,2012, less than l% or $151,453 ofthe College's net assets are restricted for revolving loan funds and
by other grantor imposed restrictions. Approximately $37,200,000 ot 42yo of the College's net assets are
At
uffesEicted and may be used to meet the College's ongoing obligations.
t0
Net Capital Assets
For the Years Ended June 30,
Incresse
20tt
2012
Capital Assets
Land and lmprovements
Construction in Progress
Buildings
Equipment
Total Capital Assets
Less Accumulated
$
$
$
$
$
6,9s6,745
4,307,6'.18
55,659,533
6,t99,534
'13,t23,490
$
s
s
$
g
6,633,055
2,704,231
48,899,44s
5,415,520
63,652,25t
(Decrease)
$
s
$
$
$
323,690
4.88o/o
t,603,447
59.29v"
6,760,088
13.82o/o
784,014
14.48o/o
9,471,239
14.88%
Depreciation
$ (21,876,481) $ (19,995,129) $ (r,881,352)
Net Capital Assets
$
51,247,009
s 43,657,t22 $
Percent
Chanqe
33.71%
7,5E9,887
As ofJune 30,2012, the College had 573,123,490 invesled in capital assets, which represented a 14.87o increase
over the prior fiscal year. The College continued work on several capital projects during the year which increased
total assets. The capital projects in progress include constructing new academic facilities to accommodate
enrollment growth, upgrading the college's road and parking systems, and modemizing its utility technological
infrastnrcture.
Cash Flows
For the Years Ended June 30,
20tt
2012
Activities
Cash Flows from Non-Capital Financing Activities
Cash Flows from Capital and Related Financing Activities
Cash Flows from Investing Activities
$
$
S
$
30,693,784
(5,481,449)
(15,736,390)
s
$
$
$
Cash
$
(12,067,852)
$
5,961,206
$
$
25,413,804
$
19,452,598
Cash Flows from Operating
Net (Decrease/lncrease in
Year
Year
Cash - Beginning of
Cash - End of
(21,543,797)
13,345,952
(25,698,253)
32,720,164
2,538,987
(3,599,692)
_!___4t.u,q91_
The College's cash position was reduced by approximately $12,000,000 during the year. This reduction was the
result ofinvesting excess cash balances and paying construction expenses associated with new academic facilities
and infrastructure improvements.
t2
Capital Asset and Debt Administration
The College increased its investments in capital assets by approximately S8,000,000 in 2012. This change was
due to the completion of several large construction projects including the Speir Dental Health building valued at
$6,566,917. Other capital projects completed during the year included a Wildlife Pavilion and expanded parking
facilities. Lastly, capital asset balances increased due to the ongoing improvements made to the College
infrastructure.
The College was able to substantially increase its net assets during the year. This increase was achieved through
enrollment growth, ongoing cost reduction initiatives, a nominal tuition increase and receipt ofthe $.01 (penny)
sales tax proceeds.
Economic Factors
As a result of state funding r€ductions in recent years, the College is forced to rely more heavily on tuition
revenue to support its mission.
Going forward, the College expects some flattening ofenrollment growth due to the ongoing economic downturn,
increased federal restrictions on financial aid, and local competition from private two-year institutions. The future
impact ofenrollment increases or decr€ases however, cannot be measured with any precision.
Yet, in spite of these economic challenges, the College remains fiscally strong and enjoys significant liquidity.
The Colleges fiscal health is supported by enrollment gro*h, ongoing cost reductions, and receipt of the local
Education Capital Improvement Sales and Use Tax.
Horry-Georgetown Technical College Follndation
A copy ofthe Horry-Georgetown Technical College Foundation audit may be obtained by mailing a request to the
Horry-Ceorgeto*n Technical College Foundation at 743 Hemlock Ave, Myrtle Beach, 5C2957?.
l3
FINANCIAL STATEMENTS
HORRY
.
GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
STATEMENTS OF NET ASSETS
JUNE 30,2OI2 AND JUNE 30,2OI I
20tt
2012
ASSETS
Curent Assets
Cash and Cash Equivalents
Cash
ind
13,229,000 $
Cash Equivalents (Restricted for Loans)
Short Term Investnents
Accounts Receivable, Net
lnterest Receivable
Loans Receivable
Prepaid Expenses
Total Current Assets
25,278,885
125,952
134,919
7,626,514
g,33g,gg2
4,907,075
8,506,788
33,725
26,007
$
82,590
25,415
231,975
29,660,338 $
39,139,535
Noncurrent Assets
Investnents
Capital Assets, Net of Accumulated Depreciation
Total Noncurrent Assets
$
15,959,200 $
51,247,009
67,106,209 $
43,657,122
47,613,132
Total Assets
$
96,766,547 $
86,752,667
2,162,646 $
968,659
252,136
3,956,010
LIABILITIES
Current Liabilities
Accounts Payable
Interest Payable
Due to Other State Agencies
Retainage Payable
Accrued Payroll and Related Liabilities
Compensated Absences Payable
Deferred Revenue
Funds Held for Others
Capital Lease Payable - Current Portion
Note Payable - Current Portion
Total Current Liabilities
0
1,303
217,620
657,699
56,406
302,776
885,t24
1,222,559
19,028
l,go7,g l3
699,354
9,577
14,363
2,043,443
551,397
9,202
0
$
6,541,373 $
128,776
5,316,361
1,635,610 $
1,546,881
Noncurrent Liabilities
Compensated Absences Payable
Capital Lease Payable - Long Term Portion
Note Payable - Long Term Portion
Total Noncurrent Liabilities
$
1,652,446
S
1,881,639
Total Liabilities
$
8,193,819 $
7.197.999
51,220,596 $
43,184,387
26,413
308,344
16,836
0
NET ASSETS
$
Invested in Capital Assets, Net of Related Debt
Restricted for
Expendable
Loans
Other
Unrestricted
132,702
133,410
18,751
l g,75l
37,200,679
36,218,120
$ ____-g!,si2,729_$
Total Net Assets
The Accompanying Notes are an Integral Part of this Statement
t4
79,554,668
HORRY
-
GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30,2OI2 AND JUNE 30,2OII
20lt
20t2
REVENUES
Operating Revenues
Student Tuition & Fees (Net of Scholarship Allowance
$7,7 14,978 for 2012 and $8,026,97 4 for 201 l)
Federal Grants and Contracts
State Grants and Contracts
Auxiliary Enterprises
Sales and Services of Education Departments
Other Operating Income
Total Operating Revenue
of
t9,254,333
$
18,313,473
1,856,424
2,057,824
5,506,1 86
5,039,717
467,977
161,755
160,629
801,391
152,430
l46,gl I
27,717,575
S
26,200,375
EXPENSES
Operating Expenses
20,467,253 s
Salaries
Benefits
5,95 1,0 I 7
16,274,143
Scholarships
Utilities
Supplies and Other Services
1,304,592
7,6l g,lg3
Depreciation
1,954,091
20,625,252
5,619,577
16,155,211
I ,3 l o,3g3
8,658,1 73
1,959,736
Total Operating Expenses
$
53,569,269 $
54,328,342
Net Operating Income (Loss)
$
(25,851,694) $
(28,127,967\
NONOPERATING REVENUES (EXPENSES)
State Appropriations
6,81
County Appropriations
Investment Income
Federal Grants and Contracts
State Grans and Contracts
ciffs
1,576
$
6,g2o,g7o
3,811,000
475,053
18,I 15,348
4,154
l8 t,373
21,715,833
2,084
325,?20
162,533
3,880,000
(13,142)
(5,613)
Interest Expense
Gain on Disposal of Fixed Asset
Other Nonoperating Revenues
Total Nonoperating Revenues (Expenses)
$
29,576,256 $
32,892,041
Income (Loss) Before Other Revenues, Expenses, Gains or Losses
$
3,724,562 $
4,764,074
Capital Grants & Gifu
Education Capital Improvement Tax
Transfers to/from Other State Agency
$
1,478,457 $
2,034,857
3,457,977
(21,569)
Increase (Decrease) in Net Assets
$
9,018,060 $
1o.235.339
Net Assets - Beginning of Year
$
79,554,668 $
69,319,329
Net Assets - End of Year
$
88,572,728
79,554,668
0
3,318
35,700
42,390
3,839,730
(24,689)
The Accompanying Notes are an Integral Part of this Statement
l5
S
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
STATEMENTS OF CASH FLOWS
POR THE YEARS ENDED JUNE 30,2OI2 AND JUNE 30, 2OI I
20lt
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and Fees (Net of Scholarship Allowances)
$
Federal, State and Local Grants and Contracts
Auxiliary Enterprise
Sales and Services of Education Deparments
Other Receipts
Student Loan Proceeds
Student Loan Disbursements
Payments to Vendors
Payments to Employees
Net Cash Provided (Used) by Operating Activities
19,087,093
$
17,729,357
6,586,542
?,438,510
801,391
152,430
467,977
228,966
33,16s,745
160,629
30,020,639
(33,165,745)
(27,596,531)
(30,976, I 60)
$
(2t,534,797)
(25,698,253)
$
6,81t,576 $
4,226,000
19,u7,493
33,404
(24,689\
30,693,784 $
161,7 55
(30,020,638)
(20,8M,688)
$
Q0,680,321\
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State Appropriations
County Appropriations
State, [rcal and Federal Grants, Gifls and Confracts - Nonoperating
Other Income - Nonoperating
Transfer to Other State Agency
Net Cash Provided (Used) by Noncapital Financing Activities
$
7,135,123
3,465,000
22,106,391
42,390
(28,730'l
32,720,164
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Principal Payment on Note
Interest Payment on Note
Capital Grants State and Local
Principal Payment Capital Lease
Interest Payment on Capital Lease
Purchase of Capital
Net Cash Provided (Used) by Capital and Related Financing
$
(437,120)
(4,356)
$
(t04,2t5)
(t0,221)
(9,540,650)
(5,481,449)
$
5,602,939
(8,842)
(1,617)
(2,939,057\
2,538,987
$
18,583,137
$
12,986,324
Net Cash Provided (Used) by Investing Activities
$
508,778
(34,828,305)
(15,736,390)
$
(16,778,949)
(3,599,692)
Net Increase (Decrease) in Cash
$
(12,058,852)
$
5,961,206
Assets
4,5
I, 136
(9,202)
(1,257)
Activities $
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sales and Maturities of lnvestnents
lnterest on Investrnents
Purchase of Investnents
Cash - Beginning of Year
Cash - End
1
25,413,804
lg2,g33
19,452,598
$_l-lJ!1,er_ $__2s,41ry91_
ofYear
The Accompanying Notes are an Integral Part of this Statemont
t6
HORRY
.
GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2OI2 AND JUNE 30, 2OI I
20n
2012
RECONCILTATION OF NET OPERATING REVENUES (EXPENSES)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITTES:
(Loss)
Operating Income
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities:
Depreciation Expense
Change in Assets and Liabilities:
Operational Receivables, Net
Loan Receivable
Accrued Payroll and Related Liabilities
Deferred Charges and Prepaid Expenses
Accounts and Retainage Payable
Compensated Absences
Defened Revenue - Operating Activities
Due to Other State Agencies
Funds Held for Others
Net Cash Provided (Used) by Operating
$
(25,851,694)
$
1,954,081
1,959,736
940,124
154,393
(se2)
4,075
337,435
55,069
Q0,t6t)
l0l,l08
1,u0,357
(53,809)
93,394
(13s,630)
(440,068)
l1g,759
(200,032)
90,404
200,01I
147.9s7
Activities
$
(21,534,797)
The Accompanying Notes are an Integral Part of this Statement
t7
(28,127,967)
$
HORX.Y. GEORGETOWN TECHNICAL COLLEGE FOUNDATION, INC.
CONWAY, SOUTHCAROLINA
COMPONENT UMT
STATEMENT OF FINANCIAL POSITION
JUNE 30,2012
20t2
ASSETS
Cash
1,407,803
Contributions Receivable, Net
553,210
6,991,475
5,525
8.858.013
Investments
Other Assets
Total Assets
LIABILITIES
Accounts Payable and Accrued Expenses
Total Liabilities
$
1,906,514
$
1,906,514
IVET ASSETS
Unrestricted
68,234
4,559,657
Temporarily Restricted
Permanently Restricted
Total Net Assets
$
2,324,609
6,951,499
Total Liabilities and Net Assets
$
_--_g,grgJ.E_
HORRY - GEORGETOWN TECHNICAL COLLEGE FOUNDATION, INC.
CONWAY, SOUTH CAROLINA
COMPONENTUNIT
STATEMENT OF ACTIVITY FOR THE YEAR ENDED JUNE 30, 2OI2
2012
SUPPORT AIID REVENUE
Contributions
$
725,451
Investment Income
Total Support and Revenue
$
844,451
I19,000
EXPENSES
Projects and Programs
$
Administrative Expenses
Total Expenses
$
2,125,803
203,639
2,329,442
Change in Net Assets
$
(1,484,991)
Net Assets - Beginning of Year
8,436,490
$ __-6e51.199_
Net Assets - End of Year
The Accompanying Notes ar16n Integral Part of this Statement
NOTES TO FINAI\CIAL STATEMENTS
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE
1
- SUMMARY OF SIGNIFICANT ACCOI]NTING POLICIES
Nature of Operations: Horry - Georgetown Technical College (the "College"), a member institution ofthe South
Carolina Technical College System, provides a range ofeducational programs to meet the needs ofthe adult population
ofHorry and Georgetown counties. Included in this range ofprograms are technical and occupational associate degree,
diploma and certificate curricula that are consistent with the needs of employers in the College's service area. As an
integral part ofthis mission, the College provides a program ofcontinuing education designed to satisfrthe occupational
demands of employers through retraining and upgrading skills of individual employees. The College also provides a
variety ofdevelopmental education programs, support services and offerings to assist students in meeting their personal
and professional educational objectives.
Reportins Entitv: The financial reporting entity, as defined by the Governmental Accounting Standards Board
('GASB) consists of the primary govemment, organizations for which the primary govemment is financially
accountable and other organizations for which the nature and significance of their relationship with the primary
govemment are such that exclusion could cause the financial statements to be misleading or incomplete. Accordingly,
the financial statements include the accounts ofHorry - Georgetown Technical College, as the primary govemment, and
the accounts of Horry - Georgetown Technical College Foundation, Inc. (the "Foundation"), its component unit. The
College is part ofthe primary government ofthe State ofSouth Carolina. However, based on the nature and significance
ofthe Foundations's relationship with the State ofSouth Carolina, the Foundation is not a component unit ofthe State
of South Carolina.
The Foundation is a legally separate, tax-exempt component unit ofthe College. The Foundation acts primarily as a
fund-raising organization to supplement the resources that are available to the College in support of its programs. The
32 member board of the Foundation is self-perpetuating and consists of friends of the College. Although the College
does not control the timing or amount ofreceipts from the Foundation, the majority ofresources, or income thereon, tlat
the Foundation holds and invests are restricted to the activities ofthe College by the donors. Because these restricted
resources held by the Foundation can only be used by, or for the benefit o{ the College, the Foundation is considered
I component unit ofthe College. The Foundation is reported in separate financial statements because ofthe difference
in its reporting model, as further described below.
The Foundation is a private not-for-profit organization that reports its financial results under Financial Accounting
Standard Board ("FASB") Statements. Most significant to the Foundation's operations and reporting model are FASB
Statement No. 116, Accounting for Contributions Received and Contributions Made, and FASB Statement No. I17,
Financial Reportingfor Not-for-ProJit Organizations. As such, certain revenue recognition criteria and presentation
features are different from GASB revenue recognition criteria and presentation features. No modifications have been
made to the Foundation's financial information in the College's financial reporting entity for these differences.
However, significant note disclosures to the Foundation's financial statements have been incorporated into the College's
notes to the financial statements.
Financial Statements ofthe Foundation can be obtained by calling the Foundation
^t
(843) 477-2116.
Financial Statements: The financial statement presentation for the College meets the requirements of Govemmental
Accounting Standards Board ("GASB") Statement No .34, Basic Financial Statements and Management's Discwsion
and Analysis for State and Local Governmenls, and GASB Statement No. 35, Basrc Financial Statements and
Management's Discussion and Analysis for Public Colleges and Universities. The financial statement presentation
provides a comprehensive, entity-wide perspective ofthe College's net assets, revenues, expenses and changes in net
assets and cash flows that replaces the fund-group perspective previously required.
l9
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING pOLICIES (continued)
Basis ofAccountins: For financialreporting purposes, the College is considered a specialpurpose government engaged
only in business-type activities. Accordingly, the College's financial statements have been presented using the economic
resources measurement focus and the accrual basis ofaccounting. Underthe accrual basis, revenues are recognized when
earned, and expenses are recorded when an obligation has been incurred. Student tuition and auxiliary enterprise fees
are presented net ofscholarships and fellowships applied to student accounts, while stipends and other payments made
directly are presented as scholarship expenses. AII significant intra-institutional transactions have been eliminated.
Private-sector standards ofaccounting and financial reporting issued prior to December l, 1989, generally are fotlowed
to the extent that those standards do not conflict with orcontradict guidance ofthe Govemmental Accounting Standards
Board. Although the College has the option ofapplying subsequent private-sector guidance issued after that date, the
College has chosen not to do so.
Cash and Cash Eqlrivalents: For purposes of the statement of cash flows, the College considers all highly liquid
inveshnents with an original maturity ofthree months or less to be cash equivalents. Funds invested through the State
of South Carolina State Treasurer's Oflice are considered cash equivalents.
Investments: Deposits and investments for the College are governed by the South Carolina Code of Laws, Title 6,
Chapter 5, "Investments ofFunds by Political Subdivisions". The College has implemented GASB StatementNo.40,
Deposits and Investment Risk Disclosures - anamendment IoGASB StatemezrNo. J. This statement requires disclosures
related to deposit risks, such as custodial credit risk, and investment risks, such as credit risk (including custodial credit
risk and concentrations ofcredit risks) and interest rate risk. The College accounts for its investments at fair value in
accordancewith GASB Statement No.3l,Accounting and Financial Reportingfor Certain Investments andfor External
Investment Pools. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component
of investment income in the statement ofrevenues, expenses and changes in net assets.
Accounts Receivable: Accounts receivable consists of tuition and fee charges to students and auxiliary enterprise
services provided to students, faculty and staff. Accounts receivable also include amounts due from the Federal
govemment, State and local governments, or private sources, in connection with reimbursement of allowable
expenditures made pursuant to the College's grants and contracts. Accounts receivable are recorded net of estimated
uncollectible amounts.
Caoital Assets: Capital assets are recorded at cost at the date ofacquisition or fair market value at the date ofdonation
in the case ofgifts. The College follows capitalization guidelines established by the State ofsouth Carolina. AII land
is capitalized, regardless ofcost. Qualifoing improvements that rest in or on the land itselfare recorded as depreciable
land improvements. Major additions and renovations and other improvements that add to the usable space, prepare
existing buildings for new uses, or extend the useful life ofan existing building are capitalized. The College capitalizes
movable personal property with a unit value in excess of$5,000 and a useful life in excess oftwo years and depreciable
land improvements, buildings and improvements, and intangible assets costing in excess of$100,000. Routine repairs
and maintenance and library materials, except individual items costing in excess of$5,000, are charged to operating
expenses in the year in which the expense was incurred.
Depreciation is computod using the straight-line method over the estimated useful lives ofthe assets, generally l5 to 50
years for buildings and improvements and land improvements and 2 to 25 years for machinery, equipment, and vehicles.
A full year of depreciation is taken the year the asset is placed in service and no depreciation is taken in the year of
disposition.
Deferred Revenues and Deposits: Deferred revenues include amounts received fortuition and fees and certain auxiliary
activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also
include amounts received from grant and contract sponsors that have not yet been eamed.
HORRY - GEORGETOWN TECHNICAL COLLECE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE I - SUMMARY OF SIGNIFICANT ACCOIINTING POLICIES (continued)
Deposits represent student fee refunds, and other miscellaneous deposits. Student deposits are recognized as revenue
during the semester for which the fee is applicable and eamed when the deposit is nonrefundable to the student under
the forfeit terms ofthe agreement.
Comoensated Absences: Employee vacation pay expense is accrued at year-end for financial statement purposes. The
liability and expense incurred are recorded at year-end as a component of current and long-term liabilities in the
statement ofnet assets and as a component ofsalary and benefit expenses in the statement ofrevenues, expenses, and
changes in net assets.
Ng$!gts:
The College's net assets are classified as follows:
Invested in capital assets, net ofrelated deDt This represents the College's total investment in capital assets,
net ofoutstanding debt obligations related to those capital assets. To the extent debt has been incurred but not
yet expended for capital assets, such amounts are not included as a component ofinvested in capital assets, net
ofrelated debt.
Restricted net assets - expendable: Restricted expendable net assets include resources in which the College is
legally or contractually obligated to spend resources in accordance with restrictions imposed by external third
parties.
Restricted nel ossets - nonexpendoble. Nonexpendable restricted net assets consist ofendowment and similar
type funds in which donors or other outside sources have stipulated, as a condition ofthe gift instrument, that
the principal is to be maintained inviolate and in perpetuity, and invested for the purpose ofproducing present
and future income, which may either be expended or added to principal.
Ilnrestricted net assers. Unrestricted net assets represent resources derived from student tuition and fees,
appropriations, and sales and services ofeducational departments and auxiliary enterprises. These resources are
used for transactions relating to the educational and general operations ofthe College, and may be used at the
discretion of the goveming board to meet current expenses for any purpose. These resources also include
auxiliary enterprises, whichare substantially self-supporting activities that provide services for students, faculty
and staff.
The College policy for applying expenses that can use both restricted and unrestricted resources is to
expense to restricted resources and then to unrestricted resources.
first apply the
Nonexchanqe Transactions: Nonexchange transactions involving financial or capital resources are transactions in
which the college either gives value to another party without directly receivingequal value in exchange or receives value
from another party without directly giving equal value in exchange. The types ofnonexchange trensactions the college
engages in include "Voluntary nonexchange transactions" (certain grants and donations), and "Imposed nonexchange
revenue" (fines and penalties), and "Government-mandated nonexchange transactions."
Voluntary nonexchange transactions usually involve eligibility requirements that must be met before transactions are
recognized. The eligibility requirements can include one or more ofthe following:
a.
b.
c.
d.
The recipient has the characteristics specified by the provider.
Time requirements specified by the provider have been met.
The provider offers resources on a reimbursement basis and allowable costs have been incurred under
the applicable program.
The provider's offer ofresources is contingent upon a specified action ofthe recipient and that action
occurred.
2l -
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JI]NE 30,2012
NOTE I - SIIMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Resources transmitted before the
deferred revenues by recipients.
eligibility requirements are met are reported as advances by the provider and
as
Assets from imposed nonexchange revenues are recognized when an enforceable legal claim to the assets arise or when
the resources are received.
Capitalizrd Interest: The College capitalizes as a component of construction in progress interest cost in excess of
eamings on debt associated with capital projects. Therefore, capital asset values do include such interest costs. During
the fiscal years ending June 30, 2012 and June 30, 201 l, no interest costs were capitalized.
ESeme-&EC: The College is exempt from income taxes under the Intemal Revenue Code.
Clossification of Revenues: The College has classified its revenues as either operating or nonoperating revenues
according to the following criteria:
Operating revenues: Operating revenues generally result from exchange transactions to provide goods or
services related to the College's principal ongoing operations. These revenues include (l) student tuition and
fees received in exchange for providing educational services and other related services to students; (2) receipts
for scholarships where the provider has identified the student recipients; (3) fees received from organizations
and individuals in exchange for miscellaneous goods and services provided by the College; and (4) grants and
contracts that are essentially the same as contracts for services that finance programs the College would not
otherwise undertake.
Nonoperating revenues.' Nonoperating revenues include activities that have the characteristics ofnonexchange
transactions. These revenues include gifts and contributions, appropriations, investment income, and any grants
and contracts that are not classified as operating revenue or restricted by the grantor to be used exclusively for
capital purposes.
Sales and Services ofEducational and Other Activities: Revenues from sales and services ofeducational and other
activities generally consist ofamounts received from instructional, research, and public service activities that incidentally
create goods and services which may be sold to students, faculty, staff, and the general public. The College receives such
revenues primarily from the following progxams: dental hygiene, massage therapy, food service and Culinary Arts
progmms.
Auxiliarv Enternrises and Interna! Service Activities: Auxiliary enterprise revenues primarily represent revenues
generated by bookstore commissions and caGteria and vending services. Revenues of intemal service and auxiliary
enterprise activities and the related expenditures ofcollege departments have been eliminated.
Restricted Cosh: The College has funds which were donated by private citizens to be used as short-term loans for
students having financial difficulties. The loans are short-term and payable within 90 days. The restricted cash amount
oquals funds available at June 30, 2012 for such loans.
Component Unit: The Foundation maintains its accounts in accordance with the principles and practices of fund
accounting. Fund Accounting is the procedure by which resources for various purposes are classified for accounting
purposes in accordance with activities or objectives specified by donors. Accordingly, net assets and changes therein
are classified as follows:
22
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLNA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE I - SUMMARY OF SIGNIFICAIIIT ACCOUNTING POLICIES (continued)
Permanentlv Restricted Net Assets: Permanently Restricted Net Assets are subject to donor-imposed
stipulations that require them to be maintained permanently by the Foundation. Generally, the donors ofthese
allorpartofthe income earned on related investments for general or specific
assets permit the Foundation to use
purposes.
Temporarily Restricted Net Assets: Temporarily Restricted Net Assets are subject to donor-imposed
stipulations that will be met by actions ofthe Foundation and./or passage of time.
Unrestricted Net Assets: Unrestricted Net Assets are not subjectto donor-imposed stipulations that willbe met
by actions ofthe Foundation and/or passage of time.
Revenues are reported as increases in unrestricted net assets classification unless use ofthe related assets is limited by
donor-imposed restrictions. Contributions, including unconditional promises to give, are recognized as revenue in the
period received. Conditional promises to give are not recognized as revenue until the conditions on which they depend
are substantially met. Contributions for in-kind gifts from outside sources are notrecorded in the Foundation's financial
records, but are accounted for and acknowledged separately.
Expenses are reported as decreases in unrestricted net assets as appropriate. Gains and losses on investments and other
assets or liabilities are reported as increases ordecreases in unrestricted netassets unlesstheiruse is restricted byexplicit
donor stipulation or by law.
Investments are reported at fair value based upon quoted market prices.
NOTE 2 - DEPOSITS AND INYESTMENTS
The following schedule reconciles deposits, investments, and petty cash funds to the Statement ofNet Assets amounts:
Primarv Government
2012
Statement of Net Assets
Cash and Cash Equivalents (Current)
Cash and Cash Equivalents (Restricted for Loans)
$
20ll
13,229,000 $ 25,278,88s
125,952
7,626,514
1s,859,200
Short-Term Investments
Investments (Noncurrent)
$l{J4r1666
Total Cash and lnvestments
(On the Statement of Net Assets)
$llJt!@
2012
Disclosure of Deposits and Investments
Carrying Value of Deposits and Investments:
Cash in Banks
Investments, Reported Amount
Total Deposits and Investments
g
11,572,764
t34,919
4,907,075
3,9s6.010
20lr
$
5,428,205
25,262,902 28,843,684
$ 36,835,666 $34,271,889
Cash on Hand
5,000
Total Cash, Deposits, and Investments
5,000
$ 36,840,666 $ 34,276,889
23
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JLINE 30,2012
NOTE 2 - DEPOSITS AND INVESTMENTS (continued)
Discretelv Presented Component Unit
Horry - Georgetown Technical College Foundation
Assets
Cash and Cash Equivalents
Investments
Total Cash and Investments
Statement
2012
ofNet
Disclosure ofDeposits and
Banks
Amount
Total Deposits and Investments
1,407,803
6,891,475
$----i2992ft
Investments
Carrying Value of Deposits and Investments:
Cash in
Investments, Reported
$
2012
$
1,407,803
6,891,475
$
8,299,278
DEPOSITS
State law requires that a bank or savings and loan association receiving State funds must secure the deposits by deposit
insurance, surety bonds, collateral securities, or letters ofcredit to protect the State against any loss.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the
College will not be able to recover deposits or will not be able to recover collateral securities that are in possession of
an outside party.
The College's bank balances on deposit were $'12,967,942 at June 30, 2012. Of these, $2,049,273 were exposed to
custodial credit risk as uninsured; however,were collateralized with securities held by the pledging institution in the
College's name. The carrying value of these deposits was $11,572,764. Restricted cash includes $125,952 held for
student loans. The cash balance at brokerage firms are insured up to $250,000 by the Securities Investor Protection
Corporation (SIPC) with additional insurance provided by the brokerage firm through an excess SIPC policy.
Denosits - Discretely Presented Component Unit
Cash and cash equivalents consist ofamounts on deposit, including interest-bearing deposits. The balances on deposit
were insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). There were no uninsured balances
at financial institutions as of June 30,2012. The balances at the brokerage firm are insured up to $250,000 by the
Securities Investor Protection Corporation (SIPC) with additional insurance provided by the brokerage firm through an
excess SIPC policy. There were no uninsured investments at June 30,2012.
II{VESTMENTS
The College is authorized, by the Souti Carolina Code oflaws, Title 6, Chapter 5, to invest in obligations ofthe United
States andits agencies, obligations ofthe State ofsouth Carolina and its political subdivisions, collateralized or federally
insured certificates of deposit, and collateralized repurchase agreements.
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI2
NOTE 2 - DEPOSITS AIIID IITMESTMENTS (continued)
The College's investments at June 30,2012, that are not with the State Treasurer's Offrce are presented below.
investments are presented by investment type and by maturity.
All
Horry - Georgetown Technical College Investments
Investrnent Type
Fair Value
I -5
Less than I
Repurchase
10,009,388
Agreements
10,009,388 $
$
6- l0
More than
l0
0$
0$
0
Money Market
Mutual Funds
2,165,502
2,165,502
0
0
0
FHLB Bonds
1,320,493
224,504
0
397,002
698,987
l2l,196
1,161,586
1,405,427
Federal Farm
Credit
BondsNotes
2,6gg,2og
Federal Home
Loan Mortgage
1,776,973
0
228,382
828,970
719,621
Notes
2,618,532
225,216
1,016,760
372,218
1,004,339
U.S. Treasury
BondsA.lotes
2,659,977
0
1,297,606
1,025,214
347,157
MunicipalBonds
2,023,929
495,510
0
826,598
701,720
Federal National
Mortgage
Association
Total Invesfrnent
$
25,262,902
$
13,120,120
$
2,653,944
4,611,588
$
$
4,877,250
Discretely Presented Component Unit
Horry - Georgetown Technical Colleee Foundation
Investment
Type
Fair Value Amount
Debt Securities:
$
Corporate Bonds
Mutual and Money Market Funds
821,827
2,587,232
U.S. Government Agencies
86,936
Common Stocks
2,154,579
Other lnvestments
1.240.902
$
TOTAL INVESTMENTS
6 8qr 475
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of a failure of the counter-party to a transaction, the
College will not be able to recover the value of investments or collateral securities that are in the possession of an outside
25
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCI.AL STATEMENTS
JLINE 30,2012
NOTE 2 - DEPOSITS AIIID IhMESTMENTS (continued)
pa(y. The College does not have a formal investment policy that
$I
0,009,3 88 investment in repurchase agreements,
$I
addresses custodial credit risk. Of the College's
0,009,3 88 of the underlying securities are held by the investments
counter-party in the College's Name.
Interest Rate Risk
Interest Rate Risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an
investment.
The College does not have a formal investment policy that limits maturities as a means of managing its exposure to fair
value losses arising from increasing interest rates.
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment
does not have an investment policy regarding credit risk.
will not fulfill its obligations. The College
The College's rated debt investments as of June 30,2012, were rated by Standard
& Poor's
and are listed below using
the Standard & Poor's rating scale.
Horry - Georgetown Technical Colleee Rated Debt Investments
Rated Debt
lnvestments
Repurchase
Agreements
$
Fair
Value
AAI
AAA
10,009,388 $
$
AA2
Unrated
$
$
10,009,388
Money Market
2,165,502
MutualFund
2,165,502
FHLB Bonds
1,320,493
1,320,493
2,689,209
2,688,209
Mortgages
1,776,973
1,776,973
FederalNational
Mortgage Association
Notes
2,618,532
2,618,532
BondsA.{otes
2,659,977
2,659,977
Municipal Bonds
2,023,928
FederalFarm Credit
BondsA.,lotes
FederalHome Loan
US Treasury
Total
Investment $
25,262,902
907,600
$
I1,064,184
26
$
907,600
$
1,116,228
l,l16,228
$
12,174,890
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTHCAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2OI2
NOTE 2 - DEPOSITS AND INVESTMENTS (continued)
Concentration of Credit Risk
Concentration ofcredit risk is the risk ofloss attributed to the magnitude ofa governments investment in a single issuer.
The College places no limits on the amount the College may invest in any one issuer.
The College had Debt Securities at June 30, 2012 totaling 52 percent of its investments. The following Debt Type
Investments represented 5 percent or more of total investments:
Debt T],pe
FHLB
Investments
Percentase
Bonds
5%
Bonds
Mortgages
Association
Bonds/Notes
Municipal Bonds
Total Investments
ll%o
Federal Farm Credit
Federal Home Loan
Federal National Mortgage
US Treasury
7%
lO%
llYo
E%
-52%_
The Discretely Presented Component Unit - Horry - Georgetown Technical College Foundation adopted a formal
investment policy on June 17, 2007, addressing custodial credit risk, foreign currency risk, credit risk, interest rate risk,
or concentration of credit risk.
NOTE 3. ACCOT]NTS RECEIVABLE
Accounts receivable
as
ofJune 30,2012 andJune 30,201 l, including applicable allowances, are summarized
$
Local Appropriations
2012
0 $
41s,000
2,858,934
2,939,389
Federal Grants and Contracts
t,776,224
922,030
Local Grants and Contracts
Less Allowance for Doubtful Accounts
Net Accounts
follows:
20tl
Student Accounts
State Grants and Contracts
as
1,573,302 3,000,193
2-324.572 1.477.872
E,533,032 8,754,484
- Students (194.140) (247.696\
Receivable
$ --838-8lD- $ --1106188-
Allowances for losses for student accounts receivable are established based upon actual losses experienced in prioryears
and evaluations ofthe current account portfolio. At June 30, 2012, the allowance for uncollectible student accounts is
valued at $194,140 and the allowance for uncollectible student accounts at June 30, 20ll was $247,696.
27
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JL,NE 30,2012
NOTE 4. LOAI\IS RECETVABLE
The College has been gifted funds that are restricted for the purpose of being loans to students that have emergency
situations. The loans are short-term loans that are repaid normally within 90 days.
NOTE 5 . CONTRIBUTIONS RECEIVABLE
The composition of Discretely Presented Component Unit contributions receivable at June 30,2012 is summarizpd as
follows:
Contributions Receivable:
Temporari ly Restricted
Total Contributions Receivable
$
$
714.200
714,200
Less:
Unamortized discount to present value
Net Contributions Receivable
060.990)
$
_553-210_
Amounts due in:
$
Less than one
69,600
One to five years
192,050
Five to ten years
30r.s60
Total
$
_553.210_
The discount rate used to determine the fair value of contributions receivable was five percent for the fiscal year ended
June 30,2012.
28
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2012
NOTE 6. CAPITAL ASSETS
PRIMARY GOVERNMENT
Beginning
Ending
Balance
Balance
July 1.201I
Capital assets not being depreciated:
Land
$
Construction in progress
Total capital assets not being depreciated
Other capital assets:
Buildings and improvements
$
48,899,445
$
56,107,916
Other capital assets, net
Capital assets, net
$
3,910,261
$_a106!y $
0$
$ 6,760,088 $
5,072,854 788,678 49,463
342,666 64,747 19,948
1,792,951 323,690
$
7,937,203
$
69,411
$
4,940,104
4,307,679
9,14?,782
55,659,533
5,812,069
387,465
2,116,641
63,975,708
0S (15,333,462)
$
(4,101,197) (558,331) 52,781 (4,606,747)
(285,429> (18,981) 19,948 (284,462)
(1,545,578) (106,232)
0 (1,651,810)
$(t4,062,925)$
Vehicles
Depreciable land improvements
Total accumulated depreciation
0$
0$
$
2,704,231 3,910,261 2,306,814
7,544,335
Depreciable land improvements
Less accumulated depreciation for:
Buildings and improvements
Machinery, equipment, and other
June 30,2012
Decreases
4,840,104
$
Machinery, equipment and other
Vehicles
Total other capital assets at historical cost
Increases
(1,270,537)
$ (1,954,081) $
72,729
$_j4,876,4qu
$_36-2187_
$
(3,318)
$__42M,227_
$@
$-9'893,]!]-
$
(19,995,129)
s,983,t22
$
$_2303,4e6_$:@
$
State inventory listing movable equipment
6,124,100
6,199,534
Total equipment per books
Reconciled difference
$
(75,434)
Renovations booked as assets
$
(48,93s)
Pending Cost Reduction
(20,564)
Pending Equipment Additions
144,933
$
Total Reconciling Items
75,434
In prior years, the financial statements of the Foundation reflected property and equipment which it purchased for the
benefit and use of Horry - Georgetown Technical College. Property and equipment purchased by the Foundation consist
of office equipment, which is immaterial to the financial statements of the Foundation and therefore, has been expensed.
29
HORRY . GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
NOTE 7. PENSIONPLANS
The Retirement Division ofthe State Budget and Control Board maintains four independent defined benefit plans and
issues its own publicly available Comprehensive Annual Financial Report (CAFR) which includes financial statements
and required supplementary information. A copy ofthe separately issued CAFR may be obtained by writing to Financial
Services, South Carolina Retirement Systems, P.O. Box I1960, Columbia, South Carolina 2921l. Furthermore, the
Division and the four pension plans are included in the CAFR ofthe State ofSouth Carolina.
Article X, Section 16, ofthe South Carolina Constitution requires that all State-operated retirement systems be funded
on a sound actuarial basis. Title 9 ofthe South Carolina Code of Laws of 1976, as amended, prescribes requirements
relating to membership, benefits, and employee/employer contributions for each pension plan. Employee and employer
contribution rates for the South Carolina Retirement System and the Police Officers Retirement System are actuarially
determined. Annual benefits, payable monthly for life, are based on length ofservice and on average final compensation.
Soulh Carolina Retirement System
The maj ority ofemployees ofthe College are covered by a retirement plan through the South Carolina Retirement System
(SCRS), acost-sharing multiple-employerdefined benefitpension plan administered by the Retirement Division, apublic
employee retirement system. Generally all State employees are required to participate in and contribute to the SCRS as
a condition ofemployment unless exempted by law as provided in Section 9-l-480 ofthe South Carolina Code oflaws.
This plan provides retirement annuity benefits as well as disability, cost of living adjustrnent, death, and groupJife
insurance benefits to eligible employees and retirees.
On July l,2006, the required employee contribution increased to 6.50 percent. Effective July 1, 201 l, the employer
contribution rate became 13.685 percent which included a 4.30 percent surcharge to fund retiree health and dental
insurance coverage. The College's actual contributions to the SCRS for the three most recent fiscal years ending June
30,2012,2011, and 2010, were $1,421,E56, $1,360,962 and $1,312,59t, respectively, and equaled the required
contributions (excludingthe surcharge) for each year. Also, the College paid employergroup-life insurance contributions
of $22,725 in the current fiscal year at the rate of .36 percent ofcompensation.
Police Oficers Retirement Estem
The South CarolinaPolice Officers Retirement System(PORS) is acost-sharing multiple-employerdefined benefitpublic
employee retirement plan administered by the Retirement Division. Generally all full-time employees whose principal
duties are the preservation ofpublic order or the protection or prevention and control ofproperty destruction by fire are
required to participate in and contribute to the System as a condition ofemployment. This plan provides annuity benefits
as well as disability and group-life insurance benefits to eligible employees and retirees. In addition, participating
employers in the PORS contribute to the accidental death fund which provides annuity benefits to beneficiaries ofpolice
officers and firemen killed in the actual performance of their duties. These benefits are independent of any other
retirement benefits available to the beneficiary.
Employees participating in the PORS are required to contribute 6.50 percent ofall compensation. Effective July l, 201 l,
the employer contribution rate became 15.663 percent which, as for the SCRS, included the 4.30 percent surcharge. The
College's actual contributions to the PORS for the years ending June 30, 2012,2011,arr.d2010. were $10,298, $16,442,
and $ l4,l 16, respectively, and equaled the required contributions of I 1.363 peroent (exoluding the suroharge) for each
insurance contributions of $l8l and accidental death insurance
contributions of$l8l in the current fiscal year for PORS participants. The rate for each ofthese insurance benefits is
.20 percent of compensation.
year. Also, the College paid employer gfoupJife
30
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JLJNE 30,2OI2
NOTE 7 - PENSION PLANS (continued)
Opt ional Re t ire me n I P ro gram
The State Optional Retirement Program (State ORP) was first established as the Optional Retirement Program forHigher
Education in 1987. In its current fonn, the State ORP is an altemative to the defined benefit SCRS plan offered to certain
state, public school and higher education employees ofthe State. The State ORP, which is administered by the South
Carolina Retirement Systems, is a defined contribution plan. State ORP participants direct the investment oftheir funds
into a plan administered by investment providers. The State assumes no liability for State ORP benefits. Rather, the
benefits are the tiability ofthe investment providers and are govemed by the terms ofthe contracts issued by them.
ORP participation is limited to faculty and administrative staffofthe State's higher education institutions who meet all
eligibility requirements for membership in the SCRS. To elect participation in the ORP, eligible employees must
irrevocably waive SCRS membership within their first ninety days of employment.
Under State law, contributions to the ORP are required at the same rates as for the SCRS, 9.385 percent plus the retiree
surcharge of 4.30 percent from the employer in fiscal year 2012. A direct remittance is required from the employers to
the investment provider for the employee contribution (6.50 percent) and a portion of the employer contribution (5
Percent). Also, a direct remittance is required to the SCRS for a portion ofthe employer contribution (4.385 percent),
which must be retained by SCRS.
Employees are eligible for group-life insurance benefits while participating in the State ORP. However, employees who
participate in the State ORP are not eligible for post retirement groupJife insurance benefits. For the fiscal year, total
contribution requirements to the ORP were $275,308 (excluding the surcharge) from the College as employer and
$190,677 from its employees as plan members. In addition, the College paid $4,400 for group-life insurance coverage
for these employees.
All
amounts were remitted to the Retirement Division of the State Budget and Control Board for distribution to the
respective annuity policy providers. The obligation for payment ofbenefits resides with the insurance companies.
Deferred
C ompens at
ion P lans
Several optional deferred compensation plans are available to State employees and employers ofits political subdivisions.
Certain employees of the College have elected to participate. The multiple-employer plans, created under Internal
Revenue Code Sections 457, 401(k), and 403(b), are administered by third parties and are not included in the
Comprehensive Annual Financial Report ofthe State ofSouth Carolina. Compensation deferred underthe plans is placed
in trust for the contributing employee. The State has no liability for losses under the plans. Employees may withdraw the
current value oftheir contributions when they terminate State employment. Employees may also withdraw contributions
prior to termination ifthey meet requirements specified by the applicable plan.
Teacher and Employee Relenlion Incentive
Effective January l, 2001, Section 9- l -2210 ofthe South Carolina Code oflaws allows employees eligible for service
retirement to participate in the Teacherand Employee Retention Incentive (TERI) Program. TERI participants may retire
and begin accumulating retirement benefits on a deferred basis without terminating employment for up to five years.
Upon termination of employ,rnent or at the end ofthe TERI period, whichever is earlier, participants will begin receiving
monthly service retirement benefits which will include any cost of living adjustments granted during the TERI period.
Because participants are considered retired during the TEN period, they do not make SCRS contributions, they do not
eam service credit, and they are ineligible to receive group life insurance benefits or disability retirement benefits.
Effective July 1,2005, employees who choose to participate in the TERI Program will be required to make SCRS
contributions. Due to the South Carolina Supreme Covt decision in Layman et al v. South Carolina Retirement System
and the State ofSouth Carolina, employees who chose to participate in the TERI Program, prior to July l, 2005 will not
be required to make SCRS contributions.
3l
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE 8. POSTEMPLOYMENT BENEFITS OTIIER THAN PENSIONS
Plan Description
In accordance with the South Carolina Code of Laws and the annual Appropriations Act, the State provides postemployment health and dental and long-term disability benefits to retired State and school dishict employees and their
covered dependents. Horry-Georgetown Technical College contributes to the Retiree Medical Plan (RMP) and the Longterm Disability Plan (LTDP), cost-sharing multiple-employer defined benefit postemployment healthcare and long-term
disability plans administered by the Employee lnsurance Program (EIP), a part ofthe State Budget and Control Board
(SBCB). Generally, retirees are eligible for the health and dental benefits ifthey have established at least ten years of
retirement service credit. For new hires May 2, 2008 and after, retirees are eligible for benefits ifthey have established
twenty-five years of service for l00Yo employer funding and fifteen through twenty-four years of service for 50oZ
employer funding. Benefits become effective when the former employee retires under a State retirement system. Basic
long-term disability (BLTD)benefits are provided to active state, public schooldistrict and participating local govemment
employees approved for disability.
Funding Policies
Section l-l l-710 and
l-l I -720 ofthe South Carolina Code ofLaws ofl976, as amended, requires these postemployment
healthcare and long-term disability benefits be funded though annual appropriations by the General Assembly for active
employees to tlle EIP and participating retirees to the SBCB except the portion funded through the pension surcharge and
provided from other applicable sources ofthe EIP for its active employees who are not funded by State General Fund
appropriations. Employers participating in the RMP are mandated by State statute to contribute at a rate assessed each
year by the Office ofthe State Budget,4.30o/o and3.90o/o ofannual covered payroll for 2012 and 201 l, respectively. The
EIP sets the employer contribution rate based on a pay-as-you-go basis. Horry-Georgetown Technical College paid
approximately $781,500 and $690,771 applicable to the surcharge included with the employer contribution for retirement
benefits for the fiscal years ended June30,20l2 and 201 l, respectively. BLTD benefits are funded through a per person
premium charged to State agencies, public school districts, and other participating local govemments. The monthly
premium per active employee paid to EIP was $3.50 for the fiscal years ended June 30, 2012 and20l1.
Effective May 1,2008 the State established two trust funds through Act 195 for the purpose of funding and accounting
for the employer costs ofretiree health and dental insurance benefits and long-term disability insurance benefits. The
South Carolina Retiree Health Insurance Trust Fund is primarily funded through the payroll surcharge. Other sources of
funding include additional State appropriated dollars, accumulated EIPreserves, and income generated from investments.
The Long Term Disability Insurance Trust Fund is primarily funded through investment income and employer
contribution.
One may obtain complete financialstatements forthe benefit plans and thetrustfunds from Employee Insurance Program,
l20l Main Stree! Suite 360, Columbia, SC 29201.
NOTE 9 - CONTINGENCIES. LITIGATION. AI\D PROJECT COMMITMENTS
The College is party to various lawsuits arising out ofthe normal conduct of its operations. In the opinion of College
management, there are no material claims or lawsuits against the College that are not covered by insurance or whose
settlement would materially affect the College's financial position.
The College participates in certain Federal grant programs. These programs are subjectto financialand compliance audits
by the grantor or its representative. Such audits could lead to requests for reimbursements to the grantor agency for
expenditures disallowed under terms ofthe grant. Management believes disallowances, ifany, will not be material.
)z
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JLINE 30, 2012
NOTE 9 - CONTINGENCIES. LITIGATION. AND PROJECT COMMITMENTS (continued)
As ofJune 30, 2012 the outstanding project commitrnents were as follows:
Expenditures
To
Pro.iect
Conway Infrastructure
Renovations Building
$
300-Conway
$
Date
Estimated
Total
1,696,872 $
Project
Estimated
Co.p!4&! !at"
4,476,160 Fall20l2
2,610,806 12,500,000 Spring 2013
4,307,678 $
16,976,160
Like any entity, the College may be subjectto various litigation in the normal course ofbusiness. The College is involved
in one such case, however the outcome ofthat case is yet to be determined. Although management believes this case will
be resolved with no liability to the College, the institution maintains appropriate insurance converge to offset any
significant financial losses associated with legal liabilities.
Other than matters disclosed above, the College management are aware ofno other contingencies, litigations or other
financial or legal commitments.
NOTE
TO
- LEASE OBLIGATIONS
Contingenl Rentals
Continlent rentals are defined, for purposes ofthis audit report, as rental agreements that can be cancelled by the College
at any foint with no further financial obligation. The College currently has two B?es ofcontingent rentals specifically
covering five automobiles and office copiers. Details ofthose contingent rentals are as follows:
Rental Aereement
Automobiles
Year
2012
20lr
Copiers
2012
20n
Expended for
Continqent Rentals
$
$
24,44r
27,s93
$
$
I17,606
89,439
Operating Leases
and
T'he Col6ge hasWo operating leases as ofJune 30,2012. The operating leases payments for equipment rental
rent made for 2012 and 201'l were as follows:
Rental Aereement
Mobile Building
Year
2012
Expended for
ODeratins Leases
367
4,50E
$
201I
s
$
$
Rental Aqreement
Year
Future Operating
Lease Pavments
Equipment
2013
20tt
Equipment
2012
34,843
27,318
Future operating lease payments are as follows:
2014
2015
2016
JJ
$
$
$
$
4s,3s7
21,617
2r,617
6,412
facility
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLTNA
NOTES TO FINANCIAL STATEMENTS
JI.JNE 30,2OI2
NOTE
11
. RELATED PARTIES
Certain separately chartered legal entities exist, whose activities are related to those of the College, primarily to provide
financial assistance and other support to the College and its educational programs. Financial statements forthese entities
are audited by independent auditors and retained by them. They include the Horry - Georgetown Technical College
Foundation, Inc.
Management reviewed its relationship with the Foundation under the existing guidance of GASB Statement No. 14, as
amended by GASB Statement No. 39. Because of the nature and significance of its relationship with the College, the
Foundation is considered a component unit of the College.
Following is a more detailed discussion of this entity and a summary of significant transactions (if any) between this
entity and the College for the year ended lune 30,2012.
The IIorrT - Georeetown Technical Colleqe Foundation. Inc.
The Foundation is a separately chartered corporation organized exclusively to receive and manage private funds for the
exclusive benefit and support ofthe College. The Foundation's activities are govemed by its Board of Directors who are
not members of the College's Board of Directors.
The College recorded non-governmental gift receipts of $ I 60, I 05 from the Foundation in nonoperating revenues for the
fiscal year ended June 30, 2012 and$1,974,956 from the Foundation in nonoperating revenues for the fiscal year ended
June 30, 201 I . These funds were used primarily to support the College by way of program development, consffuction
projects, and program support. The Foundation reimburses the College for any purchases made by the College on behalf
of the Foundation. The College provides office space and support services to the Foundation. The value of this oflice
space and support services was approximately $3,600 for the years ended June 30, 2012 and June 30, 2011.
The Foundation's assets as of June 30,2012 were $8,858,013. As of June 30,2012 the Foundation had $553,210 in
receivables, primarily due from donors (via pledges) and $1,906,514 in outstanding liabilities primarily due to the
College, for the Spear expansion.
NOTE 12 - RISK MANAGEMENT
The College is exposed to various risks of loss and maintains State or commercial insurance coverage for each of those
risks. Management believes such coverage is sufficient to preclude any significant uninsured losses forthe covered risks.
Settlement claims have not exceeded this coverage in any of the past three years.
The State of South Carolina believes it is more economical to manage certain risks internally and set aside assets for claim
settlement. Several State funds accumulate assets and the State itself assumes substantially all the risk for the following
claims of covered employees:
Unemployment compensation benefits
Worker's compensation benefits for job-related illnesses or injuries
Health and dental insurance benefits
Long-term disability and group-life insurance benefits
Employees elect health insurance coverage through either a health maintenance organization or through the State's selfinsured plan.
34
HORRY . GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JLINE 3O,2OI2
NOTE
12 -
RISK MANAGEMENT (continued)
The College and other entities pay premiums to the State's Insurance Reserve Fund (IM), which issues policies,
of loss, and pays claims incurred for covered losses relating to the following
activities:
accumulates assets to cover the risk
Theft, damage to, or destruction of assets
Real property, its contents, and other equipment
Motor vehicles and watercrafts
Torts
Natural disasters
Medical malpractice claims against the Infirmary
The IRF is a self-insurer and purchases reinsurance to obtain certain services and to limit losses in certain areas. The
IRF's rates are determined actuarially.
The College obtains coverage through a commercial insurer for employee fidelity bond insurance for all employees for
losses arising from theft or misappropriation.
NOTE
13
. NATIONAL FEDERAL DIRECT SI]BSIDIZED AI\ID TINSUBSIDIZED STAFFORD LOAI\S
The College participates in the National Federal Direct Subsidized and Unsubsidized Stafford Loan Program, which
allows the College to disburse federal loans to students which are administered by the U.S. Department of Education. The
loan activity is not reported in the accompanying financial statements because the responsibility for administration and
collection passes to the U.S. Department ofEducation afterthe loans are disbursed. The College made loan disbursements
of$32,T10,992underthisprogramduringthefiscalyear20l2and$29,819,961
forthefiscalyearendedJune30,20ll.
NOTE 14. AGENCY FI'NDS
The agency fund accounts for Student Activity Funds. The Student Activity Fund is used to account for assets held by
the College as an agent for others, such as student organizations. These organizations exist with the explicit approval of
and are subject to revocation by the College. Student Activity Funds are custodial in nature (assets equal liabilities).
The following is a summary of the changes in the Student Activity Fund:
I
June30,20l2
Balance Receipts Disbursements Balance
$533,978 $29? ,722 $147,682 $684,018
2,200
4,283
15,336
17,419
June 30,201
Student Activity
GCSAA
North American Wildlife
Technolory Association
Engineering Day
0
0
1,660
663
1,660
663
$551,397 $302,245 $154,288
35
0
0
$699,354
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JI.INE 30,2012
NOTE
15 -
CAPITAL LEASES
Future minimum lease obligations and the net present value of these minimum lease payments as of June 30,2012 are
as follows:
Business-Type
Activities
2013
20t4
20t5
$
10,459
t0,459
6,973
27,891
$
(1.478)
Less Amounts Representing Interest
Present Value
$J6.ilL
Total Minimum Lease
Payments
The scheduled maturity of the note payables and capital lease is as follows:
Princioal
lnterest
882
Payments
2013
9,577
2014
9,967
492
10,459
2015
6,869
104
6,973
Total
26,413
$
1,478
$
$
10,459
$
The College has one capital lease outstanding at June 30, 2012. This capital leases qualifies as a capital lease for
accounting purposes and therefore, has been recorded at the present value of the future minimum lease payments as of
the inception date. Assets purchased under lease totaled $47,485 with an accumulated depreciation of $28,491.
NOTE 16. LONG-TERM LIABILITIES
Long-term liabilities activity for the year ended June 30, 2012 was as follows:
Balance
Balance
Reductions Jun.Jr_2912
Additions
i Reductions
June 30, 201 I
Note Payables
CapitalLease
Compensated Absences
Payable
$
437,120 $
35,615
os $7,n0$
0
9,202
Due within
one year
0$-
26,413
1.561.244 168,966 75.572 1.654.638
_2,033212
$____168,e66
$_12.Lq21 $___1,6!1,0!.!.
$__
0
9,577
19,028
4,605
NOTE 17. STATE APPROPRIATIONS
State funds for operations for the South Carolina Technical College System are appropriated to the State Board for
Technical and Comprehensive Education (the Board), and the Board allocates funds budgeted for the technical colleges
in a uniform and equitable manner. Appropriations are recognized as revenue when received and available. Amounts that
are not expended by fiscal year-end lapse and are required to be returned to the General Fund ofthe State unless the
Board receives authorization from the General Assembl5 to carry the funds over to the next year.
HORRY . OEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2OI2
NOTE
17
- STATE APPROPRIATIONS (continued)
The following is a detailed schedule ofState appropriations revenue reported in the financial statements for the fiscal year
ended June 30, 2012 and June 30, 201 l:
2012
NON-CAPITAL APPROPRIATIONS
Appropriations per Annual Appropriations Act
Critical Needs Nursing Initiative - Proviso 5A.27
Pathways to Prosperity
$
6,615,087
2011
$
t7,790
43,204
2,993
ReadySC
Lottery Allied Health Funds
Lottery Technolory Funds
263,00t
0
132.502
Total non-capital appropriations recorded
as
1E4,957
current
$
year revenue
6,425,537
17,790
29,6E5
0
6,81
1,s76
$
6,920,970
NOTE 18 - SALES/PURCIIASES WITH OTIIER SC ItrGHER EDUCATION INSTITUTIONS
TheCollege had significant financial transactions with otherSouth Carolinapublic institutions ofhigher education during
the fiscal year. The College provided goods and/or services to other South Carolina higher education institutions for a
fee during the fiscal year ending June 30,2012, as listed below:
Amount
Institution
Florence Darlington Technical College
Coastal Carolina University
Greenville Technical College
Total
$
64,36s
349,702
8.000
$_422.067
The College received goods and/or services from other South Carolina higher education institutions for a fee during the
fiscal year ending June 30, 2012, as listed below:
Amount
Institution
$
930
1,386,478
19,248
3,661
5.300
Clemson University
Coastal Carolina University
Spartanburg Community College
Trident Technical College
Greenville Technical College
s 1.415.6t7
Total
37
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JLiNE 30, 2012
NOTE T9. OPERATING E}GENSES BY FI,'NCTION
Operating expenses by functional classification for the years ended June 30,2012 and June 30,201 I are summarized as
follows:
June 30.2012
Scholarships
Instruction
Academic Support
$
Salaries Benefits
S
l r ,857,321 S 3,328,1 I l
Student Services
Operation & Maint.
ofPlant
2,54t,254
760,t79
2,470,679
727,606
t,trl,217
414,657
Institutional Support
2,260,896
Scholarships
Auxiliary Enterprises
148,306
77
t9
$
0
0
0$
Supplies and
Other Serv.
0 |,304,592
0
s,t32
0
0
0 16,269,0|
0
,798
S 5,951,017
June 30. 20l
Student Services
Institutional Support
Scholrships
Auxiliary Enterprises
Depreciation
Total Operating Exp.$
0
3,748,3U
|,94t,204
0
0
4,77t,670
4,913,35t
16,4t7,3t7
1,946,6s7
$
r
r,830r05
2,4s0,006
2,5't9,423
$
1,061,062
2,479,t10
154,030
0
366,315
0
Utilities
0
2,226,664
2,063,340
0
0
0
$2et2"$:!rr,"7s!!!l|
$
2,152,551
1,310,393
0
0
38
1,954,081
1,954,081
$
234,505
$
0
$_11911
Depreciation
Other Serv.
r,233,t84
165
70,9t6 18,053
7,618,183
0
0
16,155,046
115,623
0
0
1,954.081
53,s69,269
Supplies and
ships
0$
3,128,473 S
0
666,128
0
724,985
Operation & Maint.
ofPlant
4,469,107
550,019
l
ScholarSalaries
17,060,934
0
0
$ t6,274,t43$ t,304,5929
t
t,t67,674
0
Toal Operating Exp. $ 20,46'1,2s3
$0
137,127
Depreciation
Instruction
Academic Support
Depreciation
I,875,502
0
0
0
700,666
,580
Utilities
$0
888,901
$
Total
$ n,ttt32g
0
0
4,349,318
4,193,309
0
0
0
0
4,964,434
s,258,238
16,309,076
93,533
0
t82,502
8,658,173
$
t,959,736
1,959,736
s:ry
t,959,736
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FINANCIAL STATEMENTS
JL,NE 30,2012
NOTE 20 - STATEMENT OF ACTTVITIES
The following information is required by the office of the Comptroller General for the State of South Carolina's
comprehensive annual financial report:
Increase/
201t
2012
$
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
$
2,231,173
26,039,746
26,144,842
5,492,834
(54,341,484)
3,335,938
6,811,576
6,920,970
27,570,764
22,917,104
5,3l g,l g7
(53,574,882)
Less Expenses
Net Program Revenue
Decrease
$
1,53 1,018
(3,227,739)
(174,647)
766,602
(1,104,765)
Transfers:
State Appropriations
(21,569)
(24,699)
Transfers To/From other State Agencies
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
9,018,060
79,554,668
10,235,339
69,319,329
(109,394)
(3,120)
(1,217,279)
10,235,339
s_!4.572.J2f$-79,554,66!.$-9,0a9g9-
NOTE 2|.STATE FISCAL STABILIZATION FTIIYDS (ARRA FTTI\IDS)
The College incurred expenditures of $23,51 I and $2,927,521 during fiscal years 2012 and 201 I respectively, under the
American Recovery and Reinvestment Act (ARRA) funding. These funds were awarded to the College via pass-through
funding from the U.S. Department ofEducation (State Fiscal Stabilization Funds), U.S. Department oflabor (Workforce
Investment Act), U.S. Department of Commence (Broadband Technology), U.S. Department of Health and Human
Services(EarlyChildhoodDevelopment),andtheU.S.DepartmentofEnergy(StateEnergyProgram).
ARRAfundswere
expended primarily for instruction and upgrades to the College's enterprise software. In addition, ARRA funds provided
scholarships, instructional equipment and services.
The schedules below list the individual funds and expenses by functional classification.
TotalARRAExpenditures TotalARRAExpenditures
ARRA
ARRA
ARRA
ARRA
ARRA
ARRA
Total
Stabilization Funding
SCDSS Early Childhood
Banner College Collaboration
Quickjobs - Carolina
Broadband Tech Grant
Hot Climate Number Two
June 30, 201 I
June 30,2012
Fund
0$
$
577
0
0
100,000
41,783
199,136
22,934
23,51
39
2,444,746
17,946
0
t23.9tO
I
2.927.521
$
HORRY . GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO FTNANCIAL STATEMENTS
JUNE 30,2012
NOTE 2I-STATE FISCAL STABILIZATION FUNDS (ARRA FUIIIDS) (continued)
Please note that all expenses, excluding the capitalized amount, are included in the functional expenses schedule in
Note
19.
llur:,e30,2012
Salaries
Instructional
Student Support
Plant
Institutional
Scholarships
0$
0
0
0
0
0$
$
0
0
0
Scholarship Other
0
0
0$ 22,934 $
0
577
0000
0
0
0
0$
0
0
$
23,511
CapitalizBd
$_q
0$
0
0
0
Total
22,934
577
0
0
$==:31I1-L
June 30,201 I
Instructional
Student Support
Plant
Institutional
Scholarships
Capitalized Total
Salaries Benefits Scholarship Other
0 $ 2,254,221
0S lU,qU $
st,829,% $ X9"834$
14,224
0
0
0
$t,844,147$
:-::::
1,650
000
0
900
26t,484
$
40
0
2,072
0
655,354
0$ 821,890$
0
00
0
00
17,946
655,354
0$2,927,521
SINGLE AUDIT ACT REQUIREMENTS
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2OI2
Federal
Project
Number
CFDA
Number
Expenditures
Federal Grantor/Pass-Through
Grantor/Program Title
U.S. Department of Education
Direct programs
TRIO Cluster
TRJO - Talent Search
TRIO - Upward Bound
P044A060595
84.044
324,779
P04740704lL
E4.047
261,896
Total - Trio Cluster
586,675
Student Financial Aid Cluster
Federal Work Study
P033A0937E8
E4.033
SEOG
P007A
788
84.007
249,900
PELL
Direct Federal Subsidized & Unsubsidized Loans
Total - Student Financial Aid Cluster
P063P092577
84.063
18,059,097
P268K112s77
84.268
32,710,992
103
51,t75.7t0
$
Total U.S, Department of Education Direct Programs
Pass Through State Dept.
Perkins
t5s,72t
51,762,385
ofEducation:
III
I
lvA408
84.048
Total Pass Through State Dept. ofED.
$
377,961
$
377,961
Total U.S. Department of Education
52,140,346
U.S. Departrnent of Labor
Direct programs
Workforce Investment Act Community Based Job Training (CBJT)
cB-18199-09-60-A-45
17.269
Total U.S. Department of Labor Direct Programs
$
37s.799
$
375,799
$
84,953
s
84,953
Pass Through Florence Darlington Technical College
Grant
7129805
Assist
Total Pass through Florence Darlington Technical College
Total U.S. Departrnent oflabor
17
.282
460.752
4t
HORRY - CEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2OI2
Federal
Project
Number
Number
529900
93.575
CFDA
Expenditures
Federal Grantor/Pass-Through
Grantor/Program Title
U,S. Department of Health and Human Services
Pass Through Greenville Technical College
Child Care Development Block Grant
$
t,903
Pass Through S.C. Technical College Board
Development
ARRA - SCDSS Early Childhood
Total U.S. Department of Health and Human Services
N/A
93.7 t3
577
$
2,480
U.S. Departrnent of Interior
Pass Thru Bureau
oflndian Affairs
Indian Affairs Work Agreement
231-l l-92H00-c00-007
sMc00090r78 1s.046 $
$
Total U.S. Department of Interior
s6,2s2
s6,2s2
U.S. Department of Commerce
Pass Thru S.C. Technical College Board
N/A
ARRA - Broadband Technolory
Total U.S. Department of Commerce
I
1.557 $
$
$
Total Federal Programs
42
22,934
22,934
s2,682,764
HORRY. GEORGETOWN TECFINICAL COLLEGE
CONWAY, SOUTH CAROLINA
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2OI2
I.
BASISOFPRESENTATION
The accompanying schedule of expenditures of federal awards includes the federal grant activity of Horry Georgetown Technical College and is presented on the accrual basis, the same basis of accounting used to
prepare the basic financial statements as described in Note I ofthe financial statements.
The information in this schedule is presented in accordance with the requirements ofOffice ofManagement and
Budget(OMB) CircularA-133, Audits ofStates, LocalGovernments, andNon Profit Organizations. Therefore,
differ from amounts used in the preparation ofthe basic financial
statements (or reported in the federal financial reports).
some amounts presented in this schedule may
2.
FEDERALNON.CASHASSISTANCE
Horry - Georgetown Technical College did not receive or expend federal awards in the form of non-cash
assistance and had no federal |oan guarantees at June 30,2012.
3.
DETERMINATION OF MAJOR PROGRAMS
Major federal programs were determined in accordance with OMB Circular A-133. For the year ended June
30, 2012, the following programs were determined to be major programs in accordance with OMB Circular A133: Student Financial Aid Cluster.
4.
RECONCILIATION OF CURRENT FIJND REVENUES TO SCHEDULE OF FEDERAL FINANCTAL
ASSISTANCE
Total per Expenditures ofFederal
Total Federal Revenue
Federal Grants
Non Operating
Awards
Operating
Grant
552-682-764
$
l'856,424
18.115.348
$J2,v)J12
Federal Direct Loans
Subsidized stafford
Unsubsidized Stafford
PIus
Loans
Total Federal
5.
Loans
Loans
14,044,418
18,400,597
265-977
Awards
$32'710'992
FEDERALDIRECTLOANS
Federal Family Education Loans were disbursed in the amount of $32,710,992 have not been recorded as
revenues in the financialstatements as administration and colleotion passes to tho U.S. DePartrnent ofEduoation
after the loans are disbursed.
6.
TYPEAPROGRAMDOLLARTHRESHOLD
The dollar threshold for Type A programs was $300,000. It was determined that the Student Financial Aid
Cluster which included the National Direct Subsidized and Unsubsidized Loans should be excluded from the
determination and audited as a major program.
43
9(
'S'8*"Ncr
Ccrtifid
Monsn, P.A.
Public Accouaterts
'SINCE tr77'
-A
Robert D. Harper, Jr. CPA
Stacey C. Moree CPA
P.
Robin B. Poston CPA
P.
O. Box 1550
O. Box 576
J07 Church Street
106 !0(/all Street, Litchfield
Cmrgetown, SC 29442
Pawleys Island, SC 29585
Tel (843) 527-1413
Tel (843) 237-9125
Fu (841) 23i-1621
Fax(84)\ 5467277
E-mail, hpm2@\c.n.com
E-mail, HPM@c.rr.com
INDEPENDENTAUDITOR'SREPORTONINTERNALCONTROLOVER
BASED ON
FINANCIAL REPoRTING AND ON COMPLIAI.{CE AND OTHER MATTERS
WITH
AN AUDIT OF FINANCTAL STATEMENTS PERFORMED IN ACCORDANCE
G OVE RN MENT A TJD IT ING STAN DA RD S
Horry, - Georgetown Commission for Technical Education
Horry, - Georgetown Technical College
Conway, South Carolina
Technical college, as of and
we have audited the basic financial statements of Horry - Georgetown
dated September 28,2012'we
for the year ended June 30, 2olz,and have issued our report thereon
College Foundation, which
did not audit the financial statements of Horry - Georgetown Technical
unit presented in the financial
represents 100 percent of the discretely piesented component
Technical college Foundation were not
statements. The financial statements ofHLrry - Georgetown
conducted our audit in accordance
audited in accordance with Government,audtting stindards.we
and the standards
with auditing standards generally accepted in-the United States of America
Auditing Standards, issued by the
applicable to financial iudits containid in Government
Comptroller General of the United States'
lntemal Control Over .Fi4ancial Reporting
is responsible for establishing and
Management of Horry - GeorgetownTechnical college
In planning and performing our audit,
maintaining effective internal control over financial reporting.
as a basis for designing our
we considered the College's intemal control over financial reporting
on the financial statements' but not
auditing procedures for,ir purpose of expressing oul opinion
control over
ioi,t. iurpor. of expressi& opinion on the effectiveness of the college's internal
on the effectiveness ofthe college's
financial reporting. Accordiigly, we do not express an opinion
internal control over financial reporting'
;
does not allow
to prevent'
functions,
assigned
performing their
management or employees, in the normal course of
or
a cgltrol
A deficiency in internal control exists when the design or operation of
weakness is a deficiency'
or detect and correct misstatements on a timely basis. A material
reasonable possibility that
is
a
combination of deficiencies in intemal control such that there
44
MsuBEns, AuenrcrN
lNsrrrurr or Crnrrrrro Puslrc AccouNTANTs 0 Sotmt C,uouNa AssocrmoN or CsnrtRro fugltc AccouNreurs
a
material misstatement of the entity's financial statements
corrected on a timely basis.
will not
be prevented, or detected and
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph ofthis section and was not designed to identifr intemal -control that
might be sigrificant deficiencies or material weaknesses. We did not identifr any deficiencies in
intJmal control over financial reporting that we consider to be material weaknesses, as defined
above.
Compliance and Other Matters
fiee
As part ofobtaining reasonable assurance about whether the College's financial statements are
provisions
of
laws,
of material misstatement, we performed tests of its compliance with certain
and
regulations, contracts, and grant agreements, noncompliance with which could have a direct
providing
an
opinion
mlterial effect on the determination of financial statement amounts. However,
we do not
on compliance with those provisions was not an objective ofour audit, and accordingly,
or other
express such an opinion. The results ofour tests disclosed no instances ofnoncompliance
matters that are required to be reported trlder Goyernment Auditing standards.
Technical College
We noted certain matters that were reported to management of Horry-Georgetown
in a separate letter dated September 28, 2012.
management, and
This report is intended solely for the information and use ofthe Alea Commission,
not be used
federaiawarding agencies and pass-thrcugh entities and is not intended to be and should
by anyone other than these specified parties.
Napu,
Padon t llonee'
P'
4'
Harper, Poston & Moree, P.A.
Certifi ed Public Accountants
Georgetown, South Carolina
September 28,2012
45
)Ns 9(
OREE,
P.A.
Ccrtificd PublicAcount trtr
_t.--'SINCE
trn'
Robin B. Poston CPA
Robert D. Harper, Jr. CPA
Stacey C. Moree CPA
P.
P.
O. Box 576
J07 Church Street
O. Box 1550
Ceorgetown, SC 29442
Tel (841) 5?i-l4l
106 Wall Street, Litchtield
l
Pau'leys lsland, SC 29585
Fax (843\ 5467277
Tel (8411 237-9125
Fax (841) 237-1621
E.mail, hpm2@c.n.com
E-mai[, HPMGc.n.com
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33
Horry - Georgetown Commission for Technical Education
Horr), - Georgetown Technical College
Conway, South Carolina
Comoliance
of
We have audited the compliance of Horry - Georgetown Technical College with the types
(OMB) Circular
compliance requirements dlscribed in the U.S. Office of Management and Budget
each of Horry on
effect
A-li3 Compliance Supplement that could have a direct and material
Georgetoil Technicai'College's major federal programs for the year ended June 30, 2012. The
of the
Colleie's major federal progr-ams are identified in the summary of auditor's results section
of
accoripanying schedute of indings and questioned costs. _ Compliance with the requirements
the
is
programs
laws, iegulations, contracts, and grants applicable to each of its major federal
Georgetown Technical College's management. Our responsibility is to
,.rponriiility of Horry,-
,*pr.5
an opinion on the College's compliance based on our audit.
in
we conducted our audit of compliance in accordance with auditing standards generally accepted
inGovernment
the United States of America; the standards applicable to financial audits contained
oMB Circular AAuditing Standards,issued by the ComptrolliiGeneral of the United States; and
tl3,,Eidts ofstates, Local Governments, andNon-Profit Organizations. ThosestandardsandOMB
about
circular 4-133 require that we plan and perform the audit to obtain reasonable assruance
have
could
that
whethernoncomplLnce withthe-tnes ofcompliance requirements referred to above
u.u3or federal progam occurred. An audit includes examining, on
with those
a test basis, evidence about Horr), - Georgetown Technical College's compliance
a direct and material effect on
inthe circumstances'
requirements andperforming suchotherprocedures as we considered necessary
does not provide
We believe that our audit provides a reasonable basis for our opinion. Our audit
a legal determination of
Horry,
-
Georgetown Technical College's compliance with those
requirements.
46
Mrusens: AvsnrceN
Ilsrrrurr or Csnrrrtro
PusLrc AccouNranrs 0 Somt C,rtouHa AssocrrnoN or CrmRro Puslrc AccouNreNrs
In our opinion, Horry - Georgetown Technical College complied, in all material respects, with the
requirements referred to above that a direct and material effect on each ofits major federal programs
for the year ended June 30, 2012.
Intemal Control Over Compliance
The management of Horry - Georgetown Technical College is responsible for establishing and
maintaining eflective intemal control over compliance with the requirements of laws, regulations,
contracts and grants applicable to federal progmms. In planning and performing our audit, we
considered the College's intemal control over compliance with requirements that could have adirect
and material effect on a major federal program in order to determine our auditing procedures for the
purpose of expressing our opinion on compliance and to test and report on intemal control over
compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an
opinion on the effectiveness of intemal control over compliance. Accordingly, we do not express an
opinion on the effectiveness ofthe College's intemal control over compliance.
A deJiciency in intemal control over compliance exists when the design or operation of
control
over compliance does not allow management or employees, in the normal course ofperforming their
assigned functions, to prevent, or detect and correct noncompliance with a type of compliance
requirement ofa federal program on a timely basis. A material weakness in intemal control over
compliance is a deficiency or combination of deficiencies, such that there are is a reasonable
possibility that material noncompliance with a type of compliance requirement ofa federal program
will not be prevented or detected and corrected, on a timely basis.
a
Our consideration ol intemal control over compliance was for the limited purpose described in the
first paragraph ofthis section and would not necessarily identifr all deficiencies in intemal control
that might be significant deficiencies or material weaknesses. We did not identifr any deficiencies
in intemal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use ofthe Area Commission, management and
federal awarding agencies and pass-through entities and is not intended to be and should not be used
by anyone other than these specified pa(ies.
tlaryr,
Paolort {lYlaru.a'
'Cft'
Harper, Poston & Moree, P.A.
Certifi ed Public Accountants
Georgetown, South Carolina
September 28, 2012
47
HORRY. GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2OI2
SUMMARY OF TI{E AUDITOR'S RESULTS
l.
2.
The independent auditor's report on the financial statements expresses an unqualified opinion.
No significant deficiencies were disclosed during the audit ofthe basic financial statements as reported in
the Independent Auditor's Report on InternalControlover Financial Reportingand on Compliance andOther
Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing
Standards.
3.
The audit disclosed no instances of non-compliance in relation to the financial statements.
4.
No significant deficiencies were disclosed during the audit ofthe major federal award programs as reported
in the Independent Auditor's Report on Compliance with Requirements Applicable to each Major Program
and Intemal Control over Compliance in Accordance with OMB Circular A-133.
5.
The report on compliance for major programs expressed an unqualified opinion.
6.
The audit disclosed no audit findings that are required to be reported in accordance with Circular A-133,
Section .510(a).
7.
The major programs ofHorry - Georgetown Technical College included in the audit were:
Prosrams
Student Financial Aid
CFDA #
cluster
84.033, 84.007, 84.063,84.375' 84.268
8.
The dollar threshold for Type A programs for Horry-Georgetown Technical College was $300,000. It was
9.
Horry - Georgetown Technical College qualifies as a low-risk auditee.
determined that the stude;t fin.ancial aid cluster which included the national direct subsidized and
unsubsidized loans should be excluded from the determination and audited as a major program
FINDNGS IN RELATION TO THE AUDIT OF THE FINANCIAL STATEMENTS
L
No matters were reported.
FINDNGS AND OUESTIONED COSTS FOR FEDERAL AWARDS
l.
No matters were reported.
48
HORRY - GEORGETOWN TECHNICAL COLLEGE
CONWAY, SOUTH CAROLINA
SUMMARY SCT{EDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 3O,2OI2
Finding 201l-Cl: U.S. Department of Education
Significant Deficiency:
Student Financial
Federal Work
sEoG
Aid Cluster:
Study
84.033
84.007
Pell
84.063
Direct Federal Subsidized and Unsubsidized Loans 84.268
Academic Competitiveness
84.375
Grant
Condition: The monitoring of internal control procedures over newly hired employees were not
sufficient to prevent incomplete documentation being provided to grantor. Verification of students was
actually performed; however, the data submitted to U.S. Departrnent ofEducation did not indicate that
the College had, in fact, verified the students. This was a result of staff not updating the correct
information on the computer system.
Current Status: This deficiency has been resolved.
49